MQ Holding AB – Year-end report

BORÅS, Sweden--()--Regulatory News:

Sharp improvement in earnings creates prerequisites for increased focus on growth

The strong fourth quarter confirms the positive trend reported by MQ throughout the entire year. Increased like-for-like sales, a higher gross margin, more efficient operations and lowered costs mean substantially increased earnings. The action programme presented one year ago has over delivered and provided MQ with financial stability. Net debt is at a historic low and the strong cash flow creates the prerequisites for increased focus on growth.

Fourth quarter (June 2014-August 2014)

· Net sales amounted to SEK 381 million (349), up 9.2 percent. Sales in comparable stores increased 7.9 percent (according to the Swedish Retail Institute Index, the market grew 2.7 percent.)

· The gross margin was 54.9 percent (51.6).

· Operating profit amounted to SEK 35 million (5), corresponding to an operating margin of 9.1 percent (1.4).

· Profit after tax was SEK 26 million (36), corresponding to SEK 0.74 (1.03) per share after dilution. The preceding year’s profit includes a positive effect of SEK 35 million on deferred taxes, resulting from a change in the corporate tax rate. Following adjustment for positive tax effects in the preceding year, profit after tax amounted to SEK 26 million (1), corresponding to SEK 0.74 (0.03) per share after dilution.

· Cash flow from operating activities totalled SEK 34 million (negative: 15).

12-month period (September 2013-August 2014)

· Net sales amounted to SEK 1,520 million (1,463), up 3.9 percent. Sales in comparable stores increased 2.6 percent (according to the Swedish Retail Institute Index, the market grew 0.1 percent.)

· The gross margin was 56.2 percent (55.3).

· Operating profit amounted to SEK 132 million (50), corresponding to an operating margin of 8.7 percent (3.4).

· Profit after tax was SEK 96 million (62), corresponding to SEK 2.76 (1.79) per share after dilution. The preceding year’s profit includes a positive effect of SEK 35 million on deferred taxes, resulting from a change in the corporate tax rate. Following adjustment for positive tax effects in the preceding year, profit after tax amounted to SEK 96 million (27), corresponding to SEK 2.76 (0.78) per share after dilution.

· Cash flow from operating activities was SEK 152 million (57).

· The Board proposes a dividend of SEK 1.36 (0.39) per share, corresponding to 50 percent of the year’s profit after tax.

Events during the fourth quarter

· The external brands Lee, Twist&Tango, Jofama, Bread&Boxers and Sail Racing women’s fashion were launched in MQ’s stores. The InWear, Matinique and Knowledge Cotton Apparel brands were launched on MQ Shop online.

· The head office in Gothenburg has been concentrated from two floors to one, which has both lowered costs and strengthened the corporate culture.

Events after the end of the reporting period

· MQ decided to close one store in Bogstadveien, Oslo. In parallel, MQ has signed a contract for a premises in Grensen, Oslo, to create MQ’s first flagship store in Norway.

· The external brands NN07 and Elvine men’s fashion have been contracted and launched at MQ during the autumn. A contract has been signed with Lacoste for launching the brand on MQ Shop online.

For further information, please contact: Christina Ståhl, President and CEO: Tel: +46 (0)31 388 80 10

Tony Siberg, Deputy CEO and CFO: Tel: +46 (0)31 388 84 01

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Contacts

MQ Holding AB
Christina Ståhl, +46 (0)31 388 80 10
President and CEO
or
Tony Siberg, +46 (0)31 388 84 01
Deputy CEO and CFO

Contacts

MQ Holding AB
Christina Ståhl, +46 (0)31 388 80 10
President and CEO
or
Tony Siberg, +46 (0)31 388 84 01
Deputy CEO and CFO